Tory dream is our nightmare

This year's Conservative conference had an air of unreality. To be honest, I always feel a bit unreal when away from home, behind the security fence in a sea of Conservative activists.

Booking a Japanese-style hotel didn't help. It had no windows, like a luxury room in a submarine.

So my sense of reality was a bit challenged. But the Tory grip on the real world was also weak.

Conservative disorientation was obvious in the adulation for Boris Johnson. With a huge rally and spontaneously cheering mobs, Borismania outstripped the public display for other top Tories.

So while Tory supporters actually have a prime minister and most of a government, they save their cheers for Johnson.

He has a high profile, but far less power than Jeremy Hunt at health, or Iain Duncan Smith at the DWP, let alone David Cameron or George Osborne.

The Tories would rather cheer for their fantasy PM Johnson than get excited about the real one they have.

They prefer playing World-Of-Boris fantasy PM games to the real thing because their ministers are hemmed in by reality. They prefer Technicolor dreams to the grey day of government.

On one side, their ministers feel limited by the Lib Dems and the coalition agreement. You might think Clegg offers as much resistance as margarine, but for the Tories, the need to run things past the Lib Dems is a constant irritation.

On the other side, the punishing financial crisis means the Tories haven't got enough money to launch pet projects.

Because they didn't win the last election and they are squeezed by the recession the government can't easily thrust rightwards or pull rabbits out of hats.

Which is why, when Osborne would love to actually cut swathes of employment regulation to "liberate" the economy, he was instead reduced to launching unpleasant, but also unworkable, shares-for-rights policies that won't really get off the ground.

The good news is that the Tories are constrained and weak. A determined stand from the labour movement can knock them back.

The other good news is that many of the party's figures deal with this reality by retreating into mad dreams.

The bad news is that if we fail to make a stand, these mad dreams could eventually become our nightmares.

The Tories are weak enough to be pushed, but our side doesn't feel strong enough to strike the blow.

I got a feel for the lie-dream of a Tory soul from an absolutely packed meeting of the Adam Smith Institute at the conference.

It really was standing room only. So I stood, squeezed between enthusiastic young Tories listening to right-wing economist Andrew Lilico saying any government spending of over 25 per cent of gross domestic product was just for "nice-to-haves like helping the poor, having the Olympics or having the opera."

Bizarrely, Lilico thinks the rest of government - roads, hospitals, schools, the police force - could carry on with spending literally halved.

It isn't unusual for people like Lilico to live in this awake dream of free-market fantasy. But I was surprised when Kwasi Kwarteng MP took the platform.

Instead of shouting: "Security mobilise!" and getting G4S to shuffle Lilico out the building, the Tory rising star started agreeing wholeheartedly.

You may have seen Kwarteng recently on Question Time. He speaks well, which can cause a five-second delay before realisation that his pronouncements are bananas.

Praising Lilico's points as "excellent," Kwarteng told us that only low tax could save the economy and only the "low tax of the UK before World War I" could really drive the kind of growth we need.

So their slogan is "back to 1913." Back to when life expectancy was 52. Back to before the NHS. Back to a school leaving age of 12.

Claiming wholesale cuts would please working-class "strivers," Kwarteng said the government needed to take "tough, courageous and brave" decisions to cut benefit and "liberalise the labour market for lower-paid workers."

The whole meeting was paid for by Jersey Finance, the trade body for Jersey's offshore financial system, and was also addressed by Jersey Finance chief executive and former HSBC head of wealth management Geoff Cook, who recommended "low taxes" and "radical free-market reform."

This is what the Tory dream looks like - a meeting calling for a return to pre-Downton Abbey Britain funded by the trade association of the Channel Islands offshore tax avoidance industry.

The Tories only recovered votes by detoxification, by draining this kind of poison. By immersing themselves in this ultra-right roleplay, the Tories show they are having a hard time dealing with reality.

But while it is mostly a comforting fantasy for Conservatives disappointed in Cameron, if we don't act, this horrible hallucination could become all too real.

• Like a lot of Brits, my US presidential election feelings are more relief than thrill - more "Thank God it's not Romney" rather than "Yay Obama!"

But I think there are some very good things about the election. The electoral debate wasn't only defined by vast expenditure on political advertising, armies of political consultants or battalions of press pundits.

Occupy Wall Street and the Wisconsin labour uprising helped to frame the political debate as working people versus the 1 per cent.

It helped that a worker at a Romney fundraiser caught the wannabe president telling his banker friends that he hates almost all Americans.

It's really worth listening to Romney's speech, leaked to the excellent left-wing US magazine Mother Jones.

Romney said: "There are 47 per cent who are with him [Obama], who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it."

The 47 per cent took their revenge. Exit polls show more voters wanted taxes raised, especially on salaries of over $250k, and that blue-collar workers in crucial states like Ohio were among the key anti-Romney voters.

US protest can influence the national political scene. Preventing Republican presidents isn't enough, but it is a start.

• Follow Solomon Hughes on Twitter @SolHughesWriter